1. Field of the Invention
The present invention relates to a business method for transforming an original negotiable collaterized debt instrument into two negotiable collaterized resulting debt instruments with two payment plans, and more particularly, to such a method wherein one of the payment plans is deferred for a predetermined period of time.
2. Description of the Related Art
Several systems have been designed in the past for alleviating the financial strains of debtors, such as homeowners. However, they fail to include alternatives for the payment plans to allow modification of the terms and conditions of the loans to reflect both the borrowers' current financial condition and the value of their homes in a way that would contribute to preserve the value of the properties. Additionally, the present business method modifies the cash flow obligations of the debtor by permitting him or her to borrow on the future appreciated value of the collateral. In most instances, the present invention will help avoid foreclosure proceedings.
Applicant believes that the closest reference corresponds to U.S. Pat. No. 4,876,648 issued to Lloyd for a system and method for implementing and administering a mortgage plan. However, it differs from the present invention because Lloyd's patented system and method is based on a partial collateralization of the mortgages through interest-sensitive investments, such as universal life insurance policies owned by the lender, on the life of the borrower. The problem with the approach is that, while the lender is protected, it increases the costs to the debtor who is looking for financial relief. The present invention, on the other hand, provides immediate relief to the debtor, substantially reducing his cash flow obligations. This, in turn, avoids other problems and preserves the value of the property.
Other patents describing the closest subject matter provide for a number of more or less complicated features that fail to solve the problem in an efficient and economical way. None of these patents suggest the novel features of the present invention.